L.A. gas prices unlikely to keep rising much longer

gasprices4.jpg They've been going up all week, but only by penny or half-penny increments each day and that usually signals a run-up is about to peak out. An average gallon of regular in the L.A. area is $4.321, according to the Auto Club, which is about 57 cents higher than a month ago and about 20 cents higher than a year ago. Significantly, though, it's also 38 cents lower than the Oct. 9 all-time high. In the world of gas price psychology, consumers don't truly freak out until prices are higher than they've ever been - and that's not going to happen this time around. Still, it's not fun having to shell out an extra 10 bucks per fill-up, and along with the federal payroll tax being restored, it's raising concerns about a drop in consumer spending, especially among low-income workers..From the WSJ:

Now, Wal-Mart is stocking more of its shelves with cheaper products, and smaller-size packages of diapers, toilet paper and snacks. Burger King is cutting its Whopper Jr. sandwich to $1.29 from about $2, and focusing advertising on its value menu items rather than higher-price salads or smoothies. Kraft and meat supplier Tyson Foods Inc. are introducing more lower-priced products to help restaurants and supermarkets adapt to the consumer spending downshift.


Two years ago, when the payroll tax was reduced as a stimulus to a weak economy, restaurants reported that the extra cash in consumers' pockets was giving a boost to their business. Food chains now worry that the absence of that cash will halt those visits or encourage diners to spend less on every trip. "When people look at their paycheck and see less money, it obviously impacts their mind-set about spending," Burger King Chief Financial Officer Dan Schwartz said in an interview. Burger King said last Friday its U.S. sales growth has slowed this year, in part due to less of an emphasis on low-price items.

As for gas, it's taken off not so much because of oil prices but because of refinery issues and market speculators. Both appear to be running their course, though as we have come to expect prices come down a lot slower than they go up.

More by Mark Lacter:
American-US Air settlement with DOJ includes small tweak at LAX
Socal housing market going nowhere fast
Amazon keeps pushing for faster L.A. delivery
Another rugged quarter for Tribune Co. papers
How does Stanford compete with the big boys?
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Further fallout from airport shootings
Crazy opening for Twitter*
Should Twitter be valued at $18 billion?
Recent Economy stories:
Those awful infographics that promise to explain and only distort
Best to low-ball today's employment report
Exit interview with Port of L.A.'s executive director
L.A. developers relying on foreign investors bend a few rules
Holiday shopping: On your marks, get set... spend!

New at LA Observed
On the Media Page
Go to Media

On the Politics Page
Go to Politics
Arts and culture

Sign up for daily email from LA Observed

Enter your email address:

Delivered by FeedBurner

Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
The multi-talented Mark Lacter
LA Observed on Twitter and Facebook